Is Apple the Real Loser in Google’s Motorola Sale?

by Matt Klassen on January 31, 2014

While it certainly looks like Google was the biggest loser this week, selling off Motorola Mobility to Chinese tech giant Lenovo for a fraction of what it paid less than two years ago, there are some who see this deal as a positive for Google, and a huge negative for tech rival Apple.

For the past nineteen months Google has struggled to properly utilize the addition of Motorola to its tech empire. Not only did Motorola experience successive quarterly losses and dwindling market share, but the purchase of the company created significant tension between Google and the Android ecosystem, tension that has since led Google’s largest Android partner, Samsung, to begin investing in other mobile platforms. This division had left both Google’s mobile presence and the Android ecosystem in shambles, analysts say, a situation that was to Apple’s distinct advantage.

But the sale of Motorola to Lenovo seems to have solved both problems with one fell swoop: allowing Google to forget about hardware and refocus itself on how to build a better Android, and allowing Google to repair the fractured relationships with its Android partners, both of which spell trouble for Apple.

As mentioned, things have been less than stellar for Google since it waded into the mobile hardware market; slumping sales, tensions in the Android ecosystem, lost market share and the fact that like Microsoft, Google seems lost in the hardware world made it an ideal time for Apple…whether Apple was able to capitalize on it, however, remains the question.

As CNET’s Shara Tibken writes, “Google’s purchase of Motorola turned out much better for iPhone maker Apple than for Google. That’s now going to change.” By divesting itself of Motorola, Google will now be able to focus itself on building a better Android, one that finally unifies and streamlines the largely fragmented Android user experience.

Further, by focusing solely on software Google can start to repair its strained relations with Samsung, a partner Google arguably needs to retain to ensure future Android success. Simply put, without the juggling act between bolstering its own hardware business and building a vibrant Android ecosystem Google will be better, and that is bad news for Apple.

“Getting rid of Motorola helps Google, and anything that Google can do to create a more cohesive user experience across vendors is competitive to Apple,” Current Analysis analyst Avi Greengart said.

But a refocused Google isn’t the only threat to Apple that has emerged out of this deal, as Lenovo’s purchase of Motorola Mobility has given the Chinese tech giant a significant share of the mobile market, and while it likely won’t turn into a mobile powerhouse overnight, Lenovo has shown a penchant for turning its shrewd acquisitions—like IBM’s PC business for instance—into industry leaders. Further, Lenovo is better situated than Apple in emerging markets likeChina, markets that will be the new frontier for mobile success in the decade to come.

In the end, while Google’s sale of Motorola to Lenovo is certainly no dagger to the heart of Apple’s mobile dominance, I can’t help but think that this shuffle will certainly negatively impact Apple’s bottom line going forward…but let’s face it, Apple’s own lack of innovation will hurt its bottom line so much more.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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